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of <h1>Tribunal Upholds Procedural Fairness in Cenvat Credit Dispute, Sets Precedent for Refund Claims</h1> <h3>M/s Ind Swift Ltd. Versus CCE, Ludhiana</h3> M/s Ind Swift Ltd. Versus CCE, Ludhiana - TMI Issues involved:Refund claim rejection without show cause notice, denial of cenvat credit on inputs/input services, remand for natural justice principle application.Analysis:The appellant, a 100% EOU, filed a refund claim for unutilized cenvat credit on inputs and input services under Rule 5 of CCR, 2004. The claim was partly rejected without issuing a show cause notice regarding the denial of cenvat credit on certain inputs/input services. The Ld. Commissioner (Appeals) remanded the matter for following the principle of natural justice. The appellant contended that no rejection of cenvat credit was raised before filing the refund claim and no show cause notice was issued, citing the decision in Verisign Services India Pvt. Ltd. case. The Revenue argued that a show cause notice could be issued invoking the extended period of limitation. However, the Tribunal noted that no show cause notice had been issued for denial of cenvat credit or rejection of the refund claim, emphasizing that the denial cannot occur post-adjudication. Referring to the Verisign case, the Tribunal held that denial of cenvat credit at a later stage is impermissible if not questioned during the availment of services, directing the adjudicating authority to sanction the refund claim within 30 days.This judgment highlights the importance of issuing show cause notices before rejecting refund claims or denying cenvat credit on inputs/input services. It underscores the principle that denial of credit cannot be raised post-facto and must be addressed during the initial stages. The decision in the Verisign case serves as a precedent, emphasizing that denial of refund claims based on later objections is untenable. The Tribunal's ruling ensures that procedural fairness and natural justice are upheld in matters concerning cenvat credit and refund claims, preventing arbitrary denials without due process. The judgment sets a clear precedent for adjudicating authorities to follow established legal principles and precedents while handling similar cases in the future, promoting transparency and adherence to legal norms in tax matters.
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